The Dernogalizer

November 24, 2008

Should We Bailout the Automakers?

Filed under: Energy/Climate,National Politics — Matt Dernoga @ 2:59 am
Tags: , , ,
Bail Me Out So I Can Produce More of These!

Bail Me Out So I Can Produce More of These!

That’s pretty much the main question dominating a lot of the news at this point. In my opinion, they should only be bailed out on one condition, and that is a mandate to put out top of the line fuel efficient cars. No more of these monster trucks. Sadly, it doesn’t look like the Big 3 are willing to do that. I’ve always had a very sour taste in my mouth when it comes to these guys.

I remember a few years back the CEO’s being asked on TV about the debate over CAFE standards, and whether or not their companies would be willing to put out more fuel efficient cars. They all spewed out their “oh, regulations will be bad for that, lets just let the market tell us which cars to produce”. Well boys, the market has spoken loud and clear. This is why I’m really realllly tempted to just say to them “if the free market is so important to you when times are good, then why should it matter any less when times are bad?”. I become even more tempted to watch them go under when you look at what they’re doing right now. Every time I’m watching TV I see a commercial for some over sized SUV that few people want or need, and the people on the commercial telling me confidently how this car gets a stunning 24 mpg highway. There’s no reason we should be bailing out anyone trying to sell us that. Of course it gets even worse when you look at the incredible salaries these CEO’s are getting while they drive their companies into the ground. And did you guys have to show up to Congress to beg for money in private jets? I hope the PR person was fired for that one.

So there’s all these reasons why I have little sympathy for the companies. My only real concern is the workers, and how the collapse of these guys will affect the economy. We’re talking about millions of jobs here, and in an economy as weak at ours, we can’t afford that kind of a rise in unemployment. There’s also the issue of fuel efficient cars. The foreign automakers might be better, but they aren’t perfect. It could be very beneficial for us if we bail out these companies, and then in return force them to produce cars with far higher fuel economy. It could be a crucial way to help solve our foreign oil dependency, while at the same time saving millions of jobs.

So these would be my conditions. For starters, there’s already 25 billion dollars allocated for the production of more fuel efficient cars. That money shouldn’t be touched for anything else, so we’re not tapping into that. I’d prefer to use the money from the 700 billion $$ already allocated, but either way would do. I’d support us dropping them a lifeline of up to 50 billion dollars, with a few simple conditions. Only 5% of cars produced can be trucks and SUVS. Average CAFE standards automatically raise to 30 mpg, and they rise by 5 mpg every 3 years. Also, more than 50% of cars produced must have hybrid technology. Sounds fair to me.

Obviously I’m living a pipe dream though, but those are the only conditions under which I would support a bailout.

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